G-8 to reduce RI's debt

The Jakarta Post, Jakarta The International NGO Forum on Indonesian Development (INFID) has urged the leaders of rich countries in the Group of Eight (G-8) to scrap the debt of the world's poorest nations, including Indonesia.

INFID said in a press statement issued on Tuesday that one feasible way was to provide an immediate debt cancellation facility without attaching any conditions such as trade liberalization and the privatization of state-owned assets.

It said such a facility should not only be given to Heavily Indebted Poor Countries (HIPC), but also to non-HIPC countries such as Indonesia, so that these poor countries could significantly reduce the number of people living in poverty as envisaged under the Millennium Development Goals.

The statement was issued as leaders of the G-8 nations prepare for a summit in Scotland on Wednesday, the key issues of which include developing antipoverty programs.

INFID said the G-8 countries should increase aid to poor countries to at least 0.7 percent of their gross national income, and help create a fair global trading system by, among other measures, eliminating subsidies given by governments to farmers in the developed nations.

"For Indonesia, debt reduction is a must in order for the country to achieve poverty reduction as set out under the Millennium Development Goals," the statement said.

It said, in 2004 the total debt repayment made by Indonesia to its foreign creditors surpassed the amount of official development assistance (ODA) provided by foreign donors.

INFID director Ivan Hadar said that the huge size of the country's foreign debt of US$134 billion gave little room for carrying out development programs.

The group also urged the government to work together with the foreign creditors to deal with the problem of debt held by the country, which was hit by the Dec. 26 tsunami.